Andrew Neil: So, Prime Minister the negotiations to leave the European Union begin. It’s a historic moment for our country. In what ways will Britain be a better country for leaving the European Union?

Theresa May: Well you’re absolutely right, Andrew, that this is a historic moment for our country. We’re putting into place now the decision that was taken in the referendum on the 23rd of June last year to leave the European Union and the formal process has begun. I’ve written to, as they say, invoke this Article 50 that people will have heard about which starts the process of formal negotiations.

As we look ahead to the outcome of those negotiations I believe that we should be optimistic as a country about what we can achieve. I think when people voted last June what they voted for was for us to be in control; in control of our borders, in control of our laws, but I think people also voted for change in the country. And that’s why alongside the work that we’re doing on Brexit I’m clear that the government has a plan for Britain to build a more outward-looking country, a stronger economy where everyone plays by the same rules. A fairer society where success is based on merit, not on privilege. And to ensure we’re a more united nation. And somewhere that children and grandchildren can be proud to call home.

AN: But we couldn’t have been better in all these ways and remained in the European Union?

TM: Well the British people decided that they wanted to come out of the European Union and I think when they did – made that vote, when they gave that very clear message to us as politicians, I think what they wanted to see was the United Kingdom making its own decisions and not feeling that decisions were being taken in Brussels. It’s – in the letter that I’ve sent to trigger this formal process today I make the point that we’re not rejecting Europe, we’re not rejecting values of democracy and European values. What we are saying is that it’s about our national self determination as the United Kingdom. It’s about us having control.

AN: All right, you’ve mentioned ‘in control’ several times, so let me start with immigration and I do that because for many people the scale of immigration over the past ten years was a major reason. Not the only reason but a major reason why they voted to leave. So can the people who voted that way, can they be reassured that immigration will be significantly lower after Brexit?

TM: Well you’re right. For a lot of people when they voted last year immigration was one of the issues that was key in their minds. Again, I think what they wanted to know was that it was – the UK government was taking control of our borders, that decisions will be made here in the UK. Now obviously we want to see migration, net migration coming down. We’ve been able to put rules in place in relation to people coming here to the UK from outside the European Union. Now, as a result of leaving the EU when we leave we’ll be able to put rules in place decided here about the basis on which people can come from inside the European Union?

AN: But will immigration be significantly lower after Brexit?

TM: Well, I think what we will see – we will see a difference in the number of people coming in, but I was Home Secretary for six years and when you look at immigration you constantly have to look at this issue because there are so many variables, so many different things that can happen in the world that affect the numbers of people trying to come here to the UK. What we will be able to do, as a result of leaving the EU, is to have control of our borders, is to set those rules for people coming from outside – from inside the European Union into the UK. We haven’t been able to do that so we’ll be able to have control on those numbers, set the rules for that, as we’ve been able to set the rules for others in the past.

AN: So what will the rules be for EU citizens coming here in the future?

TM: Well we’ve – we’re looking at the moment at what we think should be right and we will be actually bringing forward a Bill in parliament in due course which will set out our proposals. There’s, if you like, a couple of issues around people from the European Union. Of course there are quite a few people from the European Union living here in the UK already. Some of them will have been here for a considerable period of time, others will have come more recently. One of the things I want to be able to do is to give them reassurance about their future, but I only want to do that when I know that those UK citizens who’ve moved over to countries in the European Union are also going to have that reassurance and those guarantees.

AN: I understand that, but what I’m talking about is the future, for people coming here in the future from the EU. I mean would you envisage for example as part of a Brexit deal that there would still be some sort of preference for EU citizens who want to come and work here?

TM: Well, what I’m clear about is that there will still be opportunities for people to come to the UK from the EU, but we will bring forward specific proposals on what the rules should be in due course and those will go through our parliament, those will be looked at by Members of Parliament and we’ll decide what those rules should be. We want to make sure of course that our economy is still strong. We see many people here working in our economy, working in our public sector, we want to make sure that we still have that strong economy, but people want us to be in control, and that’s the important thing and that’s what we will be doing.

AN: But the Conservatives promised to cut net migration to a hundred thousand a year seven years ago. Seven years ago. You’re still nowhere near that figure. Indeed, non-EU migration, people coming from beyond the EU, that migration alone is well over a hundred thousand a year. You must understand why people are sceptical about anything you say on immigration.

TM: Well, if you look at what’s happened to those migration figures, those net migration figures over the last seven years they went up, they’ve come down, they’ve gone up again and they’ve now started –

AN: They’re still pretty high, aren’t they?

TM: – now started to come down. They are higher than we want them to be.

AN: Almost three times higher.

TM: – And you’re absolutely right about them being higher than we want them to be. But that’s why what I’ve just said is so important. That in immigration you can’t just set one set of rules and think that’s the answer and you go away and forget about it, actually you have constantly to be looking at this, constantly working at it, constantly saying have we got the rules right?

AN: But you cannot, I would suggest, reduce net migration to a hundred thousand without major cuts in both EU and non-EU migration. Isn’t that right?

TM: We need to continue to look across the board, as well as introducing rules for people from the European Union. We also need to continue looking across the board. But there’s – there’s something else we need to do as a country of course, which is to make sure that people here in the UK have the skills they need to take the jobs here so that businesses don’t feel they have to reach out overseas to bring people in all the time.

AN: Just one final thing on immigration, though. The British economy has done better than most forecasters said at the time of the referendum and it continues to look to do pretty well this year. What happens if we continue to do well and you need more than a hundred thousand migrants a year? Would you let that in – would you let them in?

TM: One of the things that I think as I’ve just said is crucial for us as we look to our economy for the future, is for us to make sure that people here in the UK are getting the training, the education, the skills they need to be able to take on the jobs for that growing economy in the future. That’s why as a government we are putting more money into technical education, for example, ensuring that young people have the opportunity to get the skills they need. I want to see a high-paid, high-skilled economy in the future, but we need to ensure that young people today are going to be able to take those jobs tomorrow.

AN: The EU’s talked of a one-off multi-billion pound exit fee. Some have suggested it could be as much as £50 billion, maybe more. Would you contemplate a sum anything like that?

TM: When people voted last year, I think one of the things they voted for was to ensure that in the future outside the EU we’re not paying, you know, significant sums of money on an annual basis into the European Union. Of course we have to look at the rights and obligations we have as a member of the EU. While we continue to be a member until we leave we will carry on paying according to the obligations we have as a member.

AN: But will we pay an exit fee of anything like 50 billion?

TM: Well, as we look at the negotiations of course we have to decide what the obligations are, but what I’m very clear about is that what people want to see is that in the future we’ll be making decisions about our budget, we’ll be deciding not to pay those sums of money every year into the European Union.

AN: I understand that and we may decide to continue with some programmes and we’d make a contribution to that, even after we leave. But I’m not talking about that. I’m talking about an exit fee that the EU is talking about- is demanding almost and it’s around 50 billion. So I ask again. Is that in the ball-park that you would contemplate?

TM: Well, you talk about an exit fee that the EU is demanding. There’s been a lot of speculation. Actually there isn’t a formal demand. The negotiations haven’t started yet. I’m very clear about what the people here in the UK expect, but I’m also clear that, you know, we’re a law-abiding nation, we will meet obligations that we have. And as a member, as I say, until the point at which we leave, of course, we’ll be continuing to pay according to the rights and obligations of that membership.

AN: I mean, many people watching this will wonder: we’re leaving. Why should we pay anything at all to leave?

TM: Well we’re not talking about paying to leave. We will be leaving the European Union. What we’re talking about is ensuring that when we leave – first of all, when we leave we will – people will see – that we’ll be taking decisions about our budget, we won’t be being required to make significant payments every year into the EU’s budget. As you say, there may be some particular programmes we want to be members of that we wish to pay in order to be members of, because it will be in the national interest to do that and that’s what will drive us.

AN: But the European Union is talking about a divorce bill. Mr Barnier, the head negotiator, is talking about a divorce bill. Are we prepared to pay a divorce bill?

TM: Well, as I say there has been a lot of speculation and a lot of comment about these –

AN: He’s the lead negotiator.

TM: – about these comments. We’re not in the negotiations yet. We’re not – we will start those formal negotiations soon. We’ve done the first step which is triggering Article 50 and as I’ve said, you know, the UK’s a law-abiding nation, we will look at the rights and obligations that we have.

AN: You mentioned already the importance of the EU citizens in the UK and UK citizens in the EU and they would like to be reassured about their future. Do you believe that you can resolve and announce this quickly?

TM: Well, one of the things I’ve put in the letter to President Tusk is precisely that I want to get an early agreement about this. And sometimes people say to me, as you have, that EU citizens here are concerned about their future and of course they are and I recognise that. But as UK Prime Minister I need to think about UK citizens who are living abroad as well in the EU.

AN: And I mentioned them, Prime Minister.

TM: Yes. And so I want a reciprocal –

AN: Can both be reassured quickly?

TM: Well I want a reciprocal agreement in terms of guaranteeing status of EU citizens and UK citizens and I’ve said that I think that this should be done at an early stage. I believe from the talks I’ve had with other leaders that there is a good will there. That there are those who recognise the importance of giving people reassurance and I think we will be able to address this as one of the early things that we talk about in the negotiations.

AN: By early, could it be this summer?

TM: Well I don’t want to put a date on it, but I want it to be as early as possible, precisely because – as you have just said – people are worried about their futures. I think it’s only fair to work to give them reassurance as soon as we can.

AN: You believe that Brexit means we can no longer be members of the single market. Why?

TM: Because the other leaders in Europe have made very clear that what they call – they use this term the four freedoms and they’re indivisible, they go together. So what are they? Well it’s the importance of free movement and of course we’ve said we want to control movement from the EU. It’s the membership of the single market entails accepting that free movement. It also entails accepting the jurisdiction of the European Court of Justice. These are exactly things that people voted to reject when they voted to leave the European Union. And so I’ve accepted that we can’t have that membership of the single market because to do it would mean accepting things that the voters have said they don’t want. But what we can do, I believe, is to get a really good trade agreement with the European Union in terms of access for our businesses to their single market and of course for their businesses to our market.

AN: But do you accept that no matter how good a free trade deal you’re going to get, and I accept you’re going to try and get the best you can, no matter how good, it can’t be as good as the unrestricted access we currently enjoy as members of the single market?

TM: Well I believe that we – what we’ll be working for and what I believe we can get is a comprehensive free trade agreement. We are looking, we would like to see as frictionless and free trade as possible, tariff free across borders so that we can continue that trade with the European Union.

AN: But it can’t be as good, can it?

TM: Well it will be a different relationship. That’s the point. It will be a different relationship because it won’t be a relationship based on membership of the single market and based on accepting all the other things that voters rejected. What it will be is saying that we want that new partnership with the EU. We still want to work with you, we want to cooperate with you and actually getting a trade agreement isn’t just about the UK. It’s not just about our businesses, it’s about businesses in other countries being able to trade with us. So I think it’s in the interests of both sides to agree a really good deal.

AN: I understand that, but your Brexit Minister, David Davis he said that there will be a free deal which will quote: ‘deliver the exact same benefits we enjoy now.’ You and I know that cannot be true. The European Union will never agree to the exact same benefits.

TM: What we’re both looking for is that comprehensive free trade agreement which gives that ability to trade freely into the European single market – and for them –

AN: But it can’t be the exact same benefits, can it?

TM: – and for them to trade with us. It will be a different relationship, but I think it can have the same benefits in terms of that free access to trade.

AN: When we leave the EU we end our membership of I think about 40 pan-European agencies and other arrangements and signs, security, air travel, health care. I just want to ask you about two specific ones. One’s a very tiny one, given the events in Westminster last week. Will our membership of Europol, the police Europe-wide service, will that continue post-Brexit?

TM: Well, that’s one of the things that we will have to negotiate as part of the negotiations.

AN: Do you want it?

TM: Because I – I think –

AN: Remain members?

TM: I think security cooperation in a number of crime and justice matters is important for us. It’s not just Europol, there are some other things. There are systems about exchanging information about people crossing borders, for example, which I think are valuable. Valuable to us and valuable to the other countries in the EU.

AN: And would you like Britain to remain a member of Europol?

TM: I would like to be able to maintain the degree of cooperation on these matters that we have currently. I’ve argued for exactly this, when, a couple of years ago, when we were looking at exactly these justice and home affairs matters. I think it is important for us, and I want us to be able to continue that degree of cooperation. But it will be part of the package of negotiations, because of course at the moment when we leave the European Union, unless we’ve negotiated still to be members of those sorts of organisations and arrangements our membership will lapse.

AN: And it lapses would we cease to share information with Europol?

TM: Well, we wouldn’t be able to access information in the same way as we would as a member. So it’s important, I think, that we’re able to negotiate a continuing relationship that enables us to work together in the way that we have. As I’ve said, right at the moment – and of course this was very much brought home to us in London last week – right at the moment now is not a time, given the threats that we face across Europe, for us to see less cooperation in this area. We want to continue that cooperation and build on it.

AM: Let me ask you another question, something concerns people: will UK citizens still be eligible for free access to healthcare across the EU through the European Health Insurance card?

TM: Well, that also will be a matter that will be part of the negotiations.

AN: But will it be your aim to secure that?

TM: We will be – I think there are two issues, there’s the issue of people who are currently resident in European Union member states and the rights that they have, and then of course the rights that people have as they move across Europe. We want to get the best possible deal for citizens here in the United Kingdom. I want to get the possible deal for everybody, in whatever part of the United Kingdom they’re living…

AN: So you would want –

TM: But we have a whole raft of negotiations that we have to go through. A whole raft of issues that we will be looking at in relation to these matters. And of course we need the flexibility of being able to deal with those issues. And the relationship will be different in the future.

AN: Of course.

TM: It’s not necessarily a question of saying are we going to replicate this or replicate that, actually we will have a different relationship with Europe.

AN: Well, you talk about a whole raft of things that have to be decided and a different relationship. Now, you need to negotiate our divorce terms. That’s highly controversial. You want a new free trade deal for goods and services, that’s highly complicated. You want new crime-fighting arrangements, new health arrangements, you need to repatriate 50 international trade agreements. Then you have to have it all ratified by 27 other countries as well as our own. All in under two years. That’s just not possible, Prime Minister, is it?

TM: It’s challenging, but I think it is possible. And the reason I think it is possible is, is this, Andrew. Well, there’s two reasons. First of all, I think it’s possible because with goodwill on both sides, I think both sides recognise that it’s in our interests to make sure that we get these arrangements in place so that when we leave we’ve got that trade arrangement, we know what it is going to be. There may be a period of implementation after the point of withdrawal, but that we know what that arrangement is, so everybody’s certain about where the future lies. So it’s in both sides’ interests to do this. But the other reason why I think it’s possible is because of course we’re not a third country in the sense of a country that’s never been part of the European Union. We’re not suddenly coming knocking at the door saying we want all of these things. We’ve been part of the EU. We’ve been operating on the same basis with them. So I think that puts us in a different position for the future and makes it easier for us to negotiate these arrangements than it would if we were coming at it completely fresh.

AN: Do you rule out a transitional period where some things, even after we leave, still remain to be resolved?

TM: What I want is, by the end of the two years everybody to know what the withdrawal agreement is and what the future relationship is. That deep – what I’ve called today – a deep and special partnership with the EU – because we’re still part of Europe – we still want to work with them and cooperate with them. I want that agreed by the end of the two years. I think that’s possible. But it may be that there have to be a period of implementation thereafter as people adjust, as businesses adjust, as governments adjust, to whatever the new arrangements are.

AN: And if there is a transitional period, or as you call it, an implementation period, would that still involve the free movement of people and being under the jurisdiction of the European Court? Or do both these things have to end in two years’ time?

TM: We want to make sure that we are ending the jurisdiction of the European Court of Justice and that we are able to control movement of people coming from the European Union.

AN: Two years?

TM: We want to have the agreements done in two years. There may, as I say, then be a period in which we’re implementing those arrangements. Just as a very simple example, you know, if there are different visa arrangements that need to be put in place the government here and governments elsewhere will have to have their systems working so that those can operate. So there may be a period where we’ve got to implement the decisions that have been taken.

AN: You said in the event of no deal we may have to change Britain’s economic model. What does that mean?

TM: Well, on the no deal, I said that no deal, first of all, I think would be better than a bad deal. We don’t want to see a bad deal. And I say that because I think there are some people in Europe who talk about punishing the UK and I don’t want to sign up to an agreement which is based on that. And then there are others here who perhaps feel that we should be so keen to get an agreement that we might sign up to things that the British people rejected when they voted to leave the European Union.

AN: But what does a different economic model mean, that was my question?

TM: Well, if we – what I’ve said in the letter today is that if we don’t get a deal, then we would go onto what are called these WTO, World Trade Organisation arrangements for trading. And what in those circumstances, I’ve made clear in the letter, that’s not what we should want. It’s not in either of our – can I just make – I’ll come to the point about the economic model, but it’s not in either side’s interests I think to have those arrangements. It’s not just about us, it’s about the EU as well. But of course whatever comes out, we want to ensure we continue to have a competitive economy. And that’s what we would be looking at.

AN: But what does a different economic model mean, I ask for a third time? What does it mean?

TM: Well, we would take decisions at the time as to what we felt was necessary to keep our economy competitive, to keep jobs here in the United Kingdom, to make sure that we were putting in place the arrangements for business that kept those jobs and so forth.

AN: Don’t you do that anyway?

TM: Well, we do work to do that. But if we –

AN: I’m not sure what a new economic model is? Labour says it’s a tax haven?

TM: What we’re talking about, Labour set up all sorts of sort of straw men about what this might be in the future. What it’s about is making sure that jobs stay here in the UK and that new jobs are created here in the UK. What it’s about is making sure we’ve got that economy that enables people to have those high paid, high skill jobs and that we’re ensuring that young people here have got those skills for the future.

AN: Let me just ask you one rather important question: if we don’t get a deal will that jeopardise our existing cooperation against crime and terrorism with our European partners? If there’s no deal, will that weaken it?

TM: Well, the, if I can separate those two out, because on some of the cooperation we have with them on terrorism, that takes place outside the European Union and outside the structures of the European Union. But if we don’t get a deal on the sort of security arrangements, the sort of criminal justice things I was talking about earlier, the exchange of information at our borders, then I think that’s one of the reasons why I think we should aim not to be in the position of getting no deal but in the position of getting a good deal. Because I think that cooperation is important to us.

AN: We’re leaving the customs union, Ireland is not. Do you accept that must mean checks on the Irish border?

TM: We are very clear, both I – and I’ve talked to the government in the Republic, the Taoiseach, about this, we’re very clear we don’t want to see a return to the borders of the past. And we’re working very closely with the Irish government about the arrangements that can be put in place to ensure a frictionless border in a practical sense, a frictionless border for goods and services and people travelling between Northern Ireland and the Republic.

AN: The Leave campaign promised a Brexit dividend of £350 million a week. Much of which they said could be spent on the NHS. How big do you think the Brexit dividend will be, and should the lion’s share go to the NHS?

TM: Well, what I think is that what people want is for what they voted for, is for the UK to be able to decide how it spends its budget. For us not to be spending those significant sums of money every year, paying those into the European Union, paying those into Brussels. So when we leave we will have control of that money and we will decide how we spend that money. I think that’s what people want to see.

AN: How big will it be? Will it be anything like 350 million a week?

TM: We will be, as part of the negotiations, we’ll be ensuring that we’re not paying those significant sums in the future. We will then be able to see what the size of that dividend will be and then determine how that money is spent, what we’re going to do with that. There’s lots of things that we need to think about.

AN: It was the NHS on the side of the bus, Prime Minister, during the referendum.

TM: That was – during the referendum there were points made, often very passionately, on both sides of the argument. We’re now beyond the referendum. We’re now at the point where we’re putting this into practise. Where we’re starting what are going to be complex, challenging, but I think achievable negotiations, and I’m optimistic about what we can achieve in the future. What people voted for is for us to have to control, and that’s what we’ll have.

AN: You’ve rejected the demands of Scotland’s First Minister for a second independence referendum. You say now is not the time. But what about when you’ve done the Brexit, when we know what the nature of Brexit is would you still rule out a second Scottish referendum?

TM: Well, the comments that I’m getting from the Scottish government and from the SNP in parliament at the moment are that they want a confirmation now that they’re going to have a second independence referendum. What I’m saying is I think now is not the time for a second independence referendum. I think now is not the time to be focusing on a second independence referendum.

AN: I understand that too, I accept that you don’t like the timing. But what about later? What about when the Brexit deal is done? The Scots can see what it looks like then, they voted to remain in the EU, they should then, people will argue, have a second decision. Are you against it in principle?

TM: If I can just explain why I said now is not the time, because I think this is relevant to the wider question, I think now is not the time to focus on a second independence referendum or to be looking at that second independence referendum, because – for two reasons: now is the time when we need to pull together as a United Kingdom. We need to be talking about how we can work together to get the best possible deal for everybody across the whole of the United Kingdom.

AN: I understand that.

TM: And focusing on an independence referendum isn’t about doing that.

AN: Do you rule it out though?

TM: And that’s why it’s so important for us to ensure that we do focus on the future and also –

AN: Do you rule it out in principle?

TM: And also I think it’s important that we recognise – I think, Andrew, the question isn’t whether there could be a second independence referendum, it’s whether there should be. And I think, you know, the British – the people of Scotland voted in 2014, they voted to stay part of the United Kingdom. The SNP themselves described it as a once in a generation, indeed a once in a lifetime opportunity to vote for independence, the people gave their message, I think, just as we are respecting the referendum that took place here last year on EU membership, so we should all respect the 2014 Scotland referendum.

AN: During the referendum you said, ‘I believe it is clearly in our national interest to remain a member of the EU.’ Now you say Brexit will, quote, ‘build a better Britain.’ Who’s the real Theresa May? Is it Theresa May the Remainer, or Theresa May the Leaver?

TM: Well, I did campaign for Remain and I did vote to remain. But I also said that I didn’t think the sky would fall in if we left the European Union, and it hasn’t.

AN: But it’s involved your doing the mother of all U-turns, hasn’t it?

TM: It’s now my job – well, my job, I’ve been put in the position as Prime Minister, I believe, to respect the wishes of the people of the United Kingdom in that referendum. I believe it’s my job now to deliver the best possible future for the UK. That’s why I have – it’s not just about Brexit, it’s about my plan for Britain. It’s about a more outward-looking Britain, a stronger economy, a fairer society and a more united nation. And it’s taking that forward which is about building a brighter future for everybody in the UK.

AN: So if it is for the will of the British people, when you do the deal, when it’s clear the terms on which we’ll leave the EU, why would you not take that to the country? Either in a second referendum or go to the country in a general election and get the people to vote for the deal that you do? Why not?TM: Well, what I’ve said is that when we have to deal there will be a vote in the UK parliament. Of course there will be votes in parliaments across Europe, because there will need to be a ratification process. I believe that’s the right way to do it. To say to the UK parliament this is your opportunity to vote for this deal.

AN: You won’t take it to the country?

TM: Well, I’m confident that we’re going to get a deal that is going to be good for the British people. The British people have basically said to us go on and get on with it. We want to leave the EU. Go out there, get the deal, get on with it, and that’s what we’re going to do.

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